Questions to Ask When Looking for a CPA

An Amazon sellersets up her accounting reports on her computer

Running your own business can be tough. Between handling staffing issues, overseeing the procurement of essential resources, and planning your next marketing campaign, you might be stretched thin — not to mention all of that dreaded accounting work that you have to do to keep your books up to date!

Like many other business owners, you might have considered using professional CPA services. Partnering with a certified public accountant is a great way to avoid tax woes and maximize the profitability of your business. However, it is essential to select the right team for the job.

With this in mind, we’ve outlined 5 questions to ask when looking for a CPA. By using the information below, you can ensure that a CPA is the right fit for your accounting needs.

What Types of Businesses Do You Typically Work With?

When you’re inquiring about CPA services, this question should be at the top of your list. While the idea of working with an accountant who has decades of experience in finance may be appealing, it is vital to make sure that the professional you choose can fully understand the unique needs of your industry.

For instance, let’s say that your organization is in the eCommerce space. Perhaps you have narrowed your search for CPA services to two top candidates. One has 20 years of experience but has never worked with an eCommerce store before and the other only has five years of experience but has primarily served online retailers. 

In general, the less experienced CPA may be better suited to handle your accounting needs, due to their industry-specific experience.

Do You Have Experience with the IRS?

While discussing the types of clients that a CPA has worked with in the past, you should also inquire about their experience with the IRS. 

Tax laws are ever-changing, which means that you need CPA services that can keep up. If your prospective accountant lacks experience with the IRS, then you may want to continue your search.

Another option is to hire a CPA to oversee bookkeeping responsibilities and an EA (enrolled agent) to deal with tax concerns. However, this will require you to vet and hire two separate entities, which can quickly add up. 

The better solution? To partner with an accounting firm that offers both tax filing and CPA services. This will be more affordable and will also ensure that all of your company’s financial needs can be managed by a single entity.

How Frequently Do You Communicate?

Like any other partnership, it is important to establish clear expectations when seeking CPA services. Before deciding on an accountant, find out how frequently you will be able to communicate with them. 

Some accountants may only reach out monthly or quarterly. More involved partners will provide you with weekly or monthly reports and will contact you periodically throughout each quarter.

Make sure that you are satisfied with the frequency and depth of communication. The last thing you want is to hire an accountant to provide CPA services, only to find that you can’t get a hold of them when an issue arises.

Do You Rely on Third-Party Accountants?

If the firm that you partner with outsources work to third-party accountants, this will impact the frequency and quality of communication. We recommend asking upfront whether the accountant will be outsourcing work related to your business. 

While there is nothing wrong with outsourcing CPA services, it is important that the provider is transparent.

How Many Hours Will You Spend on My Business?

Asking this question can help you to determine two things. First, will the CPA provide your business with the attention that it deserves? Secondly, how much are those accounting services going to cost you? 

For now, we will only focus on that first component of this question.

Ideally, you want your accountant to spend about ten hours a month on your business, if not more. Of course, this will depend on several factors, such as the CPA services that you request and the complexity of your organization. 

If you only need tax return services, then this number will be much lower. Conversely, if you hire a CPA to perform tax return, accounting, and bookkeeping services, then they may spend hundreds of hours per year on your business.

CPA services are often designed to be scalable so that you can tailor them to the needs of your company. 

In the past, an accountant was viewed as a numbers cruncher. The expectation was that they would assess your books, run some numbers, and ensure that all financial records were accurate.

However, quality CPA services involve much more than just making a series of complex calculations. The best accountants will use numerical data to provide information about your company’s performance overall. They will also take the time to explain what the numbers mean so that you can make informed business decisions.

How Much Do You Charge?

So how much does an accountant cost anyway? The answer is “it depends.” When inquiring about the costs of CPA services, you should not only ask how much they charge but also what billing format that they use. 

There are three primary billing formats that are used by accountants, which are:

Hourly Rates

Traditionally, CPA services are billed by the hour. The more complex your books are, the longer the accountant will need to spend on them. As you might imagine, this can make it quite difficult to calculate the cumulative costs of accounting services. This problem is compounded by the fact that hourly rates vary greatly among bookkeepers and CPAs.

For example, the average rate for a bookkeeper ranges from $30 to $90 per hour. CPA services are much more costly, with hourly rates fluctuating between $150 and $450.

When discussing costs, ask what the firm charges per hour. If their rates are near the top of the spectrum and your books are way behind, expect to pay several thousand dollars for the first month of services alone.

Per Engagement Fees

Depending on your experience with bookkeeping and the complexity of your business, you may only need CPA services for large projects, such as your annual tax preparation. 

In these instances, accountants generally charge flat fees. These rates may fluctuate from a few hundred dollars for a simple tax return to as much as $5,000 for a comprehensive financial audit.

Monthly Flat Fees

Perhaps the best option for small businesses is a CPA service that charges flat monthly fees. These expenses are extremely easy to work into your budget and often cost far less than an accountant who charges by the hour.

Usually, accounting firms that offer flat monthly rates have several levels of service. These tiers are divided based on your company’s monthly expenses. For example, businesses that have $20K in monthly expenses will be charged less than an organization with $80K in monthly expenses.

What Accounting Software Do You Have Experience With?

Our final question can reveal a lot about your prospective accounting partner. We are not encouraging you to choose your CPA services provider based solely on what software they use. Instead, the goal here is to find out whether they are using the latest technologies to maintain your books or if they are relying on outdated manual processes that are more likely to introduce errors.

When answering this question, the CPA firm should be able to provide you with a very nuanced answer. They should confidently answer your question while also explaining why they use the technologies that they do. 

Take this a step further and ask them how these particular programs will benefit your business. The CPA should clearly outline how the software they use will add value to your organization.

You should also find out which online bookkeeping features their preferred programs include. Comprehensive CPA services should include online bookkeeping tools that are easy for you to use. These tools should also provide valuable insights into your company’s financial health.

Lastly, find out whether they offer a free demonstration or trial. While any accounting firm can talk up their CPA services, only a select few have the confidence to offer a trial period. 

Once you have had an opportunity to interact with the software, you will know if it is the right match for your company.

Accountant CPA Services from Xendoo

Even when you know what questions to ask, finding the right online CPA services for your growing business can be tough. Thanks to Xendoo, that is no longer the case!

Our firm offers a full suite of online CPA services for small businesses, including tax return processing, accounting and booking solutions, and much more. 

Concerned that your books are too far behind? Don’t worry, we can help with that, too! Xendoo’s “Catch Up” services are designed specifically for businesses that have fallen a few months (or a few years) behind.

Xendoo can handle all of your online CPA needs so that you can stop thinking about the past and start focusing on your future. We even provide a convenient free trial so that you can see our solutions in action. Contact us today to learn more! 

Articles on

Small Business Tips